Price of oil nears $55 a barrel; low distillate stockpiles a factor

| Thursday, October 14, 2004

The price of oil reached within a hair’s breadth of the $55 barrier Thursday, Oct. 14, closing on the New York Mercantile Exchange at $54.76.

At one point during the day’s trading, the price of crude oil for delivery in November reached $54.88.

Media outlets reported that the price ran up after the U.S. Energy Department released a report saying the nation’s stocks of fuels such as diesel and heating oil had dropped. Those two oil products are part of a group called distillate fuels.

Concerns about low diesel and heating oil supplies, and possible competition between users of the two fuels for limited crude oil supplies, had already driven up diesel prices to historic levels.

This week, for the first time in history, the average price of diesel has been above $2 a gallon in every region of the country for two weeks in a row.

In addition, long-range weather forecasters have predicted a cold winter in the Northeast – the region of the country that consumes the most heating oil each winter.